The Paradoxes of post-Cold War US Defense Policy: an Agenda for the 2001 Quadrennial Defense Review

Project on Defense Alternatives Briefing Memo #18
5 February 2001

Abstract

Discussion of the 2001 Quadrennial Defense Review has focused on military readiness and modernization issues. Many policy leaders contend that the US military is suffering the effects of a severe "strategy-budget" mismatch. There is significant support to "put strategy in the driver's seat" -- to let strategy determine budgets. For some policy makers and analysts, this implies increasing the annual defense budget by $40 billion or more. But this approach to understanding and resolving the recent problems in US defense policy is too narrow. The 2001 QDR debate should have a broader purview. At minimum it must confront three persistent paradoxes of post-Cold War US defense policy: (i) the paradox of rising requirements despite declining threats; (ii) the paradox of our stalled defense reform and
transformation efforts despite a global context of multiple revolutions -- strategic, technological, and economic; and, (iii) the paradoxical or inadvertent effects of emphasizing America's military power as a tool to stabilize the post-Cold War world, which have been
to sow dissent among our allies, feed anti-Americanism in some important corners, and stimulate counter-balancing behavior. Putting more resources behind the present US military strategy will not resolve these paradoxes; it may only deepen them. A more profitable approach would be to re-examine (i) the security goals that motivate our strategy, (ii) the strategy itself, and (iii) the nature and mix of security instruments that the nation has at its disposal. For our armed forces the most important requirement is transformation -- not a large new infusion of resources.

It is
remarkable that a decade that began as the 1990s did -- with the
conclusion of the Cold War -- should end as the 1990s has ended: with
defense spending again on the rise and Cold War security concepts,
institutions, and practices enjoying a renaissance of sorts. As the
Pentagon begins in earnest to prepare the second Quadrennial Defense
Review, defense managers have focused their attention on military
readiness issues and the challenge of modernizing or
"re-capitalizing" the US military. Within the Washington defense
policy community there is a near consensus on one proposition, if no
others: the solution to the problems of readiness and modernization
involve increased defense spending. But if the QDR process is to be
true to its purpose, decision-makers should pause before dipping the
budget ladle, step back, and reconsider today's problems in light of
the profound geostrategic changes of the past decade. Never has our
nation and its allies enjoyed so much relative strength and
influence. At no point in the past hundred years has the potential
for general conflagration been so low. So what is the source of our
difficulties? How can peace be so expensive?

Given some perspective, the recent difficulties in US defense policy seem more like paradoxes than
garden-variety "problems." From a distance, the stated military
readiness and modernization needs of our nation are not so much
"challenging" as they are "bewildering". This suggests that today's
problems have been improperly framed or defined; we are treating them
at the wrong level of policy. A common conceit is that our military
suffers a severe "strategy-budget" mismatch and that what we need to
do is to put strategy in the driver's seat. We might more
profitably re-examine the security goals that motivate our strategy,
the strategy itself, and the nature and mix of the instruments that
the strategy has at its disposal. This back-to-the-drawing-board
agenda best suits the purpose of QDRs.

The QDR debate should begin not by addressing narrowly-defined "problems", but by confronting the
persistent paradoxes of post-Cold War US defense policy.
Three paradoxes stand out:

The first paradox is that defense spending has remained near Cold War levels (in real terms) and is now
rising, despite the continuing decline in the magnitude of military
threats to vital US interests. The Pentagon budget for 2001 is 82%
as high as the inflation-adjusted average for the 1980s, the peak
decade for peacetime defense spending. Per person expenditures will
be 12% higher in 2001 than in 1989.

It is common practice to portray America's post-Cold War military retrenchment in terms of a
comparison between the highest spending year of the 1980s and the
lowest of the 1990s, which indicates a spending decline of one-third
or more. But comparing aggregate spending during the 1980s and 1990s
belies this impression. Aggregate Pentagon spending during the
1990s was 86.5% as high as the total for the 1980s (adjusted for
inflation) -- $3.11 trillion compared to $3.61 trillion.1 This, despite
the so-called "procurement holiday".2 Thus, we were able during the
1990s to extract a financial peace dividend of approximately $500
billion -- a sum equivalent to 15 months of spending during the
Reagan-Bush peak. Calculated on a per person basis, the Pentagon
actually spent 11 percent more in real terms during the 1990s than
during the 1980s.

Despite the post-Cold War decline in total US military expenditures, America's share of world military
spending has increased 20 percent since 1985. Whereas in 1985 the
United States spent only 65 percent as much on defense as did
potential "threat states", it will spend more than twice as much as
this group in 2001. In other words, our standing relative to "threat
states" has improved by a factor of more than three -- from only 65
percent of their total in 1989 to more than 200 percent today.3

At the geostrategic level, the pivot point of the two decades -- what separated and distinguished
them -- was the collapse of the Soviet Union, the implosion of
Russia, and the defection of most of its former European allies to
the West. Together these events comprised a geostrategic revolution
of a magnitude hard to appreciate. This may help explain why, ten
years after the fact, we still have not come to terms with
it.

2.1 Threats-- then and now
During the Cold War, the Warsaw Pact commanded a military organization of eight million active-duty
troops and first-line reserves. In many respects these troops were
the peers of their Western opposites and they had at their disposal
more than 9000 tactical aircraft, 65,000 tanks, thousands of advanced
missiles of all ranges, and more than 50,000 nuclear, chemical, and
biological weapons.

Two million of the Warsaw Pact troops stood permanently within easy striking distance of the Western
heartland, able to launch a total assault with only a few months
warning -- some said a few weeks. A Western loss or sacrifice of 100
miles along the European "central front" would certainly have meant
the fall of continental Europe. In terms of America's strategic
interests, such a loss would have been incalculable; the cost of
reversing it, unimaginable.

Today this threat lies in ruins -- dismembered, disaffected, and disabled militarily, politically, and
economically. Russian arms production for foreign or domestic use is
10 percent of the 1991 level. Russian military expenditure is today
only 18 percent of Soviet spending in 1987 -- speeding the military's
transition from crisis to ruin.4 Presently the Russian economy is
only 20 percent as large as the Soviet economy of 1987 and, of
course, Moscow no longer commands the resources (or territory) of
Eastern Europe. Someday Russia may revive to effectively counter
Western prerogatives, although its geostrategic position would be
less favorable than before. Certainly the desire to "rise again"
militarily is greater in Russia today than before NATO expansion and
the Kosovo war. However, as the past decade indicates, any process
of reconstituting Russian power -- which must encompass the Russian
polity, economy, and military -- will take decades.

The practical military response in the West to Soviet collapse has been to treat it principally as a
European regional issue. But, of course, the Soviet threat was a
global one -- and not simply because of the global reach of the
Soviet military. For four decades the former Soviet Union served as
the organizing center, training camp, and supply depot for war
against the West.

During the 1980s the Warsaw Pact countries poured $300 billion worth of arms into the world. Since
1989, however, the arms exports under Moscow's control have declined
by 90 percent -- down to less than $3 billion per year presently.
Notably, China has not risen to take the place of the Soviet Union as
a peer arms trade competitor to the West: its arm exports fell from
2.6 billion in 1987 to less than 1 billion today. Neither have other
arms producers in the third world faired well in the new market: as a
group (including China), their arms exports have fallen since 1987
from approximately $6 billion to $2.6 billion today.5

As a consequence of the
geostrategic revolution, the armed forces of "rogue" states have been
in steep decline for a decade.6 Taking Iran, Iraq, Syria, Libya,
and North Korea as a group: since the late 1980s their military
spending has fallen 70 percent; their arms imports are barely 10
percent of what they once were. The Defense Intelligence Agency has
found in several successive Outyear Threat Reports that
armored threats like that posed by Iraq in 1990 are rapidly
diminishing. DIA calculates that by 2005 such threats are likely to
be less than 20 percent as large as those of the early 1990s.7 More generally,
without the technical support, funds, and arms once provided by
superpower patrons, yesterday's rogue giants have lost the capacity
to equip, train, sustain, or employ armed forces of the size and
quality typical of the 1980s.

It is conventional wisdom that "rogue states" will become more reliant on terrorism, ballistic
missiles, and Weapons of Mass Destruction (WMD). Notably, this type
of threat is asymmetric to the vast bulk of present Western military
investment and preparation. However, in preparing responses to
asymmetric threats it is important to pay attention not only to their
character, but also their magnitude. In all cases the missile and
WMD threats are modest, minor, or simply prospective compared to
those the West confronted during the Cold War. Similarly, with
regard to the threat of foreign terrorist and guerilla attacks
against US targets: incidents have declined, not increased, since the
1980s.8

Since 1989, 105 Americans have been killed in 41 attacks against US targets overseas, including the
recent attack against the USS Cole. During the 1980s, 571 were
killed in 69 attacks. Within the United States there has been a
marked increase in terrorist killings, but these were overwhelming of
domestic origin; indeed, most the killings during the 1990s -- 95
percent -- were due to a single incident: the 1995 bombing of the
Federal Office Building in Oklahoma City. And almost all terrorist
attacks everywhere during the 1990s have relied on small arms and
explosives, rather than unconventional means.9

2.2 Increased "requirements" reflect more ambitious goals
Key to understanding the
discrepancy between US budget trends and the evolution of military
threats are the post-Cold War changes in how the US defense
establishment calculates military requirements. In several
important ways today's practices differ from those of the Cold War
period:

First, statements of requirements
have become detached from any close, empirical assessment of concrete
threats or threat potentials.

Second, the strategic and
operational goals against which requirements are assessed have grown
more ambitious.

The diminished status of "real and
present dangers" in calculating military requirements is codified in
so-called "capability-based planning", which contrasts with the Cold
War practice of "threat-based planning". The capability-based
approach lowers the threshold of concern to allow a variety of future
possible and hypothetical threats to take positions of prominence in
the calculus of requirements. Military capabilities are then devised
to counter (more or less) this broader, longer-term range of
potential threats.

Implicit in this approach is a fundamental change in the objective of our military preparations --
indeed, an unacknowledged change at the level of national security
goals. Whereas once we sought to deter and defend against threats
that were known or visibly emerging, today we seek to hedge against
the possibility of threat itself. But this conceit begs an
important question: how does one prepare effectively and efficiently
against that which one does not know?

There is a tendency, perhaps irresistible, to fill the void of uncertainty with the image of past
dangers -- and this can give outmoded structures and capabilities a
new lease on life. At best, the ghosts of past threats vie with
visions of future possible threats in the calculation of military
requirements -- and both square-off against real and present needs.
At any rate, the imagination is always richer than the treasury and,
for this reason, capability-based planning virtually guarantees
perpetual shortfalls in the funding of "requirements."

Complementing the change in how we calculate requirements is a growth in US strategic objectives. This
is evident in the increased emphasis on the "environment shaping"
role of the armed forces, as distinct from its traditional functions
of defense, deterrence, and crisis response. Environment shaping
involves using military power in ways short of war to channel
strategic developments down chosen paths. Shaping activities include
military-to-military contacts, some multinational exercises, military
assistance programs, and global military presence. (Peacekeeping and
stability operations mix "environment shaping" and crisis response
goals). The increased emphasis on environment shaping entails an
expanded role for the armed services in the conduct of US foreign
policy. And its success is supposed to depend on the maintenance of
US military primacy.

Turning to the operational goals of our military: increased ambitions are evident in regional war
plans that seek to deploy, fight, and win multiple major conflicts
ever faster, with fewer casualties, and across an expanding range of
possible contingencies and scenarios. More ambitious operational
goals are also evident in the military's increased reliance on new
forms of strategic warfare as putative means for achieving fast,
decisive, low-risk results. One such form is information warfare.
Another was demonstrated in the Kosovo war: standoff precision attack
on homeland political, economic, and communications infrastructure
targets.

These operational goals serve a strategic one: the translation of America's post-Cold War military
primacy into a useful lever of influence. When global superpower
contention ended, America's obvious security interests in far-flung
conflicts declined, making it more difficult to build and sustain a
domestic political consensus favoring intervention. And the
political difficulties grow proportionately with the time, risk, and
casualties associated with an intervention. Thus, the utility of
America's post-Cold War edge in military power depends on translating
it into a capacity for fast, low-risk operations. (Apart from
actually putting such a capability to use, simply possessing it would
increase America's influence abroad.)

Given these tendencies in recent defense planning and goals it is not surprising that military
"requirements" are rising despite a recession in the magnitude of
threats. Another factor contributing to the appearance of a
budget-requirements mismatch is the failure of defense reform
efforts. This failure defines the second paradox of post-Cold War US
defense policy.

3.1 America's paradoxical military readiness crisis
Central to recent discussions of US military requirements have been concerns about military readiness. These figured prominently in former President Clinton's 1999 decision to add $112 billion to future defense budgets and they play a major
role today in proposals to further increase spending.

However, like the question of military requirements generally, paradox pervades the readiness
issue.10

The readiness problems that purportedly reached crisis proportions in 1997-1998 bear no clear
relationship to funding levels. Readiness spending per person in
uniform averaged 22 percent more (in inflation-adjusted terms) during
the Clinton years than on the eve of the 1990-1991 Gulf
War.

Smaller-scale US military operations are supposed to have driven our armed forces to the
breaking point, but on an annual basis these operations have required
deployment of only 4 percent of active-duty
personnel.

DoD frequently asserts that the
number of named contingency operations have increased three-
or four-fold since 1989, but this measure is almost entirely lacking
in analytical value. It says nothing about the change in size or
duration of missions. Another factor that diminishes the value of
this measure is the increased tendency during the 1990s to name
operations or to parse individual operations and assign names to all
the parts. Thus, since 1992, there have been 45 US operations
undertaken with regard to situations in just two places: the
former-Yugoslavia and Iraq.

Readiness, more than any other aspect of military capability, depends on how a military is organized
and carries out its business. For this reason a failure to adapt the
organization and functioning of our armed forces to new circumstances
might express itself as readiness problems. And, indeed, in a
variety of ways defense managers have failed to adapt our armed
forces to the new era.

3.2 The failure of reform
The past decade has been shaped by a series of interlocking "revolutions" -- strategic, economic, and
technological. The need to adapt our armed services is broadly
recognized. Talk of a "military revolution" is common in the
services. Nonetheless, beginning with the 1995 Commission on Roles
and Missions, the actual progress of US military reform,
restructuring, and transformation has been desultory. Ten years
have passed but our armed forces remain poorly adapted to the
challenges and opportunities of the new era. This is the second
paradox haunting US defense policy.

A partial exception to this
paradox concerns the so-called Revolution in Military Affairs (RMA),
which the Pentagon seems to embrace. But, to the consternation of
RMA advocates (both inside and outside the military), their vision
has been largely co-opted by the Pentagon status quo. It now
functions not as a blueprint for fundamental structural reform but as
a rationale for "re-capitalizing" traditional structures along fairly
traditional lines -- at fabulous expense. Today, the RMA is more a
shopping spree than a revolution. As for other aspects of defense
reform (such as infrastructure reduction): these have disappeared
almost entirely from the policy agenda.

This second policy paradox (lack of reform) contributes to the first (rising budgets) because it
entails various types of inefficiency:

One type is manifest in excess infrastructure -- a Cold War residue. Today the armed forces still maintain 20 percent excess infrastructure. Crude, costly, and
seemingly intractable, this problem has had little political
salience.

A second type of inefficiency derives from inter-service rivalry and redundancy.

A third type of inefficiency involves having military "tools" and procedures that do not correspond closely to today's operational challenges. In a rough analogy, our military is trying to drive screws with a
hammer.

A final type of inefficiency results from the failure to fully exploit information-age technology and organizational principles, which could reduce structural redundancies in our military and increase its flexibility. By
contemporary business standards, our military remains an industrial
age organization.

The relevance to readiness of having to support excess infrastructure should be clear: it drains money away from base training, maintenance, and quality-of-life
accounts. Having the wrong tools for today's jobs also pertains to readiness problems. Much of the concern about readiness focuses on so-called "high-demand, low-density" assets and units, such as
special operations forces, military police units, various types of service support units, A-10 attack aircraft, and electronic warfare, reconnaissance, and lift aircraft. That these shortages persist
despite the expenditure of more than $250 billion on procurement during the past five years indicates a failure to configure our armed forces to meet current needs. And, it is worth noting,
"high-demand, low-density" assets do not figure prominently in future modernization plans either -- even though these plans may drive defense spending up by another $20-$30 billion annually. In the
case of one such asset, the A-10 attack plane, neither its outstanding service in Desert Storm nor the continuing demand for its services can sway its owner, the US Air Force, from pursuing
procurement on the opposite end of the equipment spectrum, where the F-22 resides.

Finally, the impact of organizational issues on readiness is evident in the failure to distribute operational burdens more evenly among commands, thus
creating pockets of overly stressed units. This is what happened to the Air Force during the mid- and late-90s: some commands were ground down while others carried a much lighter load. One imperative of
operations in the new era is that our armed forces become more flexible in allowing assets to flow across commands and theaters to where they are needed.11

Together the two paradoxes that we have summarized so far imply a military that is larger than necessary for narrow defensive purposes, relatively inefficient, and increasingly irrelevant (thus ineffective). To this litany of negative attributes we can add another: In important respects, our current military strategy is counter-productive. It undermines some of the goals that it is supposed to serve.

The third paradox of recent US policy involves its emphasis on military power as a lever for
stabilizing the strategic environment and consolidating US global
leadership. This emphasis is apparent in American military activism
and the expanded foreign policy role of the US military; it is
implicit in today's emphasis on environment shaping missions. It
also drives US arms transfer policies, missile defense initiatives,
enhancements to regional intervention capabilities, and efforts to
develop new forms of strategic warfare.

Unfortunately, rather than
reassuring friends and dissuading potential competitors, these
efforts have sown dissent among allies and stimulated
anti-Americanism among those outside the Western sphere.12 They also have
added impetus to regional arms races. These dynamics portend a
dangerous combination of weakened alliances and increased tensions.
At the same time, multilateral security mechanisms -- such as arms
control regimes and inclusive security organizations -- have been
devalued and weakened during the past decade. In these ways the
emphasis on bolstering and exploiting military primacy invites
competition and undermines the stability goals it is supposed to
serve. It helps sustain a militarized international system and could
eventually lead to a repolarization of the world. In sum, the
present orientation runs the risk of contributing to its own problem
set.

A greater emphasis on routine environment shaping activities also implies greater vulnerability for
our armed forces. The necessary concomitant, the flip-side, of
engagement is exposure. So while global military
activism may stimulate opposition, expanded peacetime engagement may
provide it with easier targets. A case in point is the 12 October
2000 attack on the USS Cole in the port of Aden, Yemen, which claimed
17 lives. The attack may have been the latest round in the duel of
bombings and cruise missile strikes that have followed the 1998 US
operation against Iraq. The Navy's use of Aden -- an insecure port
in an unstable country governed by a barely functioning state -- was
itself part of an "environment shaping" effort authorized by the
chief of Central Command.

Another worrisome instance of inadvertent affects concerns the spread of weapons of mass
destruction (WMDs). As the United States improves its singular
capacities for strategic information warfare, rapid regional
intervention, and stand-off precision attack on strategic targets,
the attraction of fielding asymmetric countermeasure -- including
WMDs -- increases among that subset of countries that can imagine
getting on the wrong side of American power. Likewise, deployment of
missile defenses inspires countermeasures. These elementary
principles of arms race stability have been occluded by today's
fixation on military primacy. Few nations will simply acquiesce to
a widening of military power differentials that they find
disadvantageous, especially if these are associated with military
activism; they will do what they can to narrow the gap. And because
these dynamics breed fear, suspicion, and uncertainty on all sides,
they add an independent impetus to political tensions that might
otherwise be more manageable.

One source of the paradoxes in recent US defense policy is the shift from threat-based to
capability-based planning. Another is the ambitious military
strategy first codified in the 1997 Quadrennial Defense Review (QDR),
although operative earlier. The 1997 QDR proposed that the United
States develop and use its armed forces to do three things: respond
to crises, shape the strategic environment in ways favorable to US
interests, and prepare now for possible future threats. Maintaining
a distinct and permanent military superiority over all current and
prospective threats was an explicit corollary of this
strategy.

Formally, the QDR strategy was a collaborative effort of the Office of the Secretary of Defense and
the Joint Staff. Actually, the joint and service staffs (and their
contracted think tanks) exerted predominant influence over most
inputs to the review: threat assessment, strategic concepts, conflict
simulations, and the definition of force requirements. The
intellectual lineage of the QDR's ambitious strategy traces back to
the 1992 National Military Strategy and 1992 Defense Guidance
document, which were developed under the auspices of Dick Cheney,
Colin Powell, and Paul Wolfowitz during the first Bush
administration. The 1992 documents introduced most of the concepts
that later surfaced as central to the QDR, including the two war
strategy. The QDR itself draws heavily on the logic and language of
studies that Rand Corporation conducted for the Joint Staff beginning
in the late-1980s.

The principal conservative
critique of Clinton defense policy actually accepted as sensible most
features of the QDR strategy. (The role of humanitarian operations,
a Clinton Administration innovation, was an exception.) But the main
thrust of the conservative critique had to do with resources.
Conservatives argued that President Clinton's defense budget, force
structure, and modernization plans did not adequately support the
Administration's own (actually, the Joint Chiefs') QDR strategy. Of
course, if this were true, then the QDR strategy should have been
rejected outright as failing to fulfil the basic imperative of
strategy: to relate ends and means.

During its last two years, the Clinton administration, mired in crisis and with an eye toward the
2000 election, acceded to the conservative critique on resource
issues, declaring the peace dividend over and agreeing to increase
the Pentagon's budget substantially. This set the terms for the
defense policy "debate" during the 2000 election campaign and it is
presently the starting point for discussion of the next QDR. Today,
the de facto or working consensus among top defense managers
is to make more resources available for the strategy set out in the
1997 Quadrennial Defense Review. Of course, fully resourcing the
QDR will not resolve the recent problems of US defense policy because
these are rooted in the strategy itself.

Rather than carrying forward the legacy of the 1997 QDR, the current review and debate should aim for a fundamental rethinking of US post-Cold War policy. This can begin by confronting the persistent paradoxes of recent policy, especially
the three summarized above. These draw attention to problems in how we assess security threats and problems in our strategy for dealing with them. The third problem area is defense reform -- or, rather,
the lack of it.

Attention to defense reform in particular provides a basis for collaboration across the traditional
political divide in defense debates. Defense reform --encompassing
infrastructure reduction, business reform, military restructuring,
doctrinal innovations, and changes to the personnel and training
systems -- aims to improve the effectiveness, efficiency, and
relevance of our armed forces. These are goals with appeal for
liberals and conservatives alike. Equally important, there is
widespread support for defense reform among military personnel,
especially below the ranks of top administrators. Many service
people see the personnel and training systems as broken -- a key
source of readiness problems; many see the existing division of labor
among the services and branches as tradition-bound, redundant, and
increasingly obsolete; and many appreciate the need for adapting the
armed forces -- their structures and doctrines -- to meet new era
challenges.

2. America's "procurement holiday" during the
1990s was distonctly a "working holiday." Aggregate US outlays for
military procurement during the 1990s were 76 percent as high as the
total for the 1980s. During the 1990s the United States procured 70
naval fightingships, 700 fixed-wing combat aircraft, and 1450 tanks,
artillery, and other armored vehicles.

3. Principal sources for international spending
comparisons are International Institute for Strategic Studies,
The Military Balance 2000-2001 (London: Oxford University Press,
2000); Stockholm International Peace Research Institute, SIPRI
Yearbook 2000 (London: Oxford University Press, 2000); and, US
Department of State, World Military Expenditures and Arms
Transfers 1998 (Washington DC: US Government Printing Office,
2000)

With offices in Washington DC and Cambridge MA, the Project on Defense Alternatives develops and promotes defense policy innovation that reconciles the goals of effective defense against aggression, improved international cooperation and stability, and lower levels of military spending and armed force worldwide. Subscribe to the monthly PDA Updates Bulletin.